Tumor microenvironment is comprised of dysfunctional immune cells that have been reprogrammed by active tumor-mediated processes to defeat tumor-specific immunity. Two major mediators of poor tumor immunity are dysfunctional APCs including stromal macrophages (MFs) and regulatory T cells (Tregs). MFs are one of the most important cellular components and APCs in solid human tumor stroma. However, the nature of MFs in HUMAN tumor microenvironment is poorly understood. Our data demonstrate two distinct MF populations in human ovarian cancer: B7-H4+TGF-?high and B7-H4- TGF-?low MFs. We observed that (i) B7-H4+TGF-?high MFs suppress T cell activation and blocking B7-H4 reduced this suppressive activity;(ii) Repetitive stimulation with B7-H4+TGF-?high MFs converted naive T cells into CD4+CD25+ T cells with strong FOXP3 expression;(iii) B7-H4- MFs can be switched into B7-H4+ MFs in response to tumor Tregs. The data lead to our 3 specific aims to test the following hypotheses: Aim 1. B7-H4+TGF-?high and B7-H4-TGF-?low MFs are distinct macrophage subpopulations Aim 2. B7-H4+TGF-?high MFs induce regulatory T cells through TGF-? and B7-H4 Aim 3. Tumor environmental elements promote MF differentiation toward B7-H4+TGF-phigh macrophages. The proposal mechanistically links several layers of the immunosuppressive networks in the tumor environment including dysfunctional APCs, Tregs and stromal cells, and provide a consensus to explain how the immunosuppressive networks work together in forming tumor immune tolerization in human tumor. Furthermore, in addition to ovarian cancer, we found B7-H4+ MFs in colon cancer and breast cancer. The proposal may demonstrate that induction of B7-H4+TGF-?high MFs is a broad and novel mechanism for carcinomas to escape from cellular immune responses and targeting this specific MF population is a novel strategy for treating human cancers.